CONSTRUCTION IN PROGRESS

9 Months Ended

Jul. 31, 2011

10. CONSTRUCTION IN PROGRESS

Construction in progress as of July 31, 2011 and October 31, 2010 were as follows:

	2011		2010
	US$		US$

Ah City Industrial Park phase Two Project		1,920,087

Total Construction In Progress		1,920,087

Plant and production lines currently under development at the Ah City Phase Two are accounted for as construction-in-progress. Construction-in-progress is recorded at historical cost, including development expenditures, professional fees and the interest expenses capitalized during the course of construction for the purpose of financing the project. Upon readiness for use of the project, the cost of construction-in-progress is transferred to property and equipment, at which time depreciation will commence. The Company had no capitalized interest and to date has funded this construction through operations without the use of outside debt financing. As of July 31, 2011, the Company has incurred a total of $1,920,087 of construction-in-progress. The Ah City Phase Two is expected to be completed in the end of 2012 and these amounts will be reclassified to fixed assets when it is ready to use.